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The Demographics of Today's Retired Investor

Retirement has changed in America in the past 20 years, and that means retirees have likely changed as well.

Where retirement was once a perceived goal for American workers who reached the magic age of 65, today retirement can be put off well into a person’s 70s, while many others with the affluence necessary to live without working are calling it quits in their late 50s.

Retirement has also changed in terms of how people live during their retirement years. From the historic view of a time for slow vacations and hands of bridge, retirement has become a far more active stage of life for many investors.

In Spectrem’s studies, retirees with a net worth of $100,000 or more (not including primary residence) are asked to define themselves in terms of demographic categories like upbringing, investment strategies and personal and national concerns. As of Jan. 1, 2018, here is what Spectrem knows about today’s retirees:

Ninety-one percent of retirees are financially comfortable, claiming they believe they have enough assets to live well through the rest of their lives.

Seventy-three percent say their financial situation has improved over the last year. This could be a result of stock market advances or some effect from the new tax laws. However, 77 percent of investors who are still working see an improvement in their finances over the last year.

As investors, there is a near 50-50 split between those who want to pay attention to their investments on a regular basis and those who prefer to set the numbers and percentages and let the portfolio grow.

Forty-nine percent of retirees like investing and do not want to give up that part of their lives. Fifty-six percent like to be involved in the day-to-day management of their investments. In both cases, they are less than 10 percent below non-retirees in terms of investment involvement.

Asked to define the factors which led to their current level of wealth, retirees are more likely than working investors (80 percent to 73 percent) to note that “frugality’’ was involved. They were much less likely to point to family connections as a way they became wealthy (6 percent for retirees to 14 percent among working investors).

In terms of national concerns, retirees may have more time to worry about events of the world, and take advantage of that time to focus on the issues which affect American lives than do working investors. For example:

Eighty-two percent of retirees express concern over the political environment in America, and 80 percent complain about government gridlock. In both cases, they have a higher percentage of concern than working investors (69 and 74 percent, respectively).

Though they likely spend less time on the internet than working investors and perhaps do less online shopping, 79 percent of retirees are worried about cyber-attacks and computer hacks more than working investors (70 percent).

Top Takeaways for Advisors

Advisors are advised to keep these attitudes and issues in mind when talking to both new and ongoing clients who are in the retirement phase of their lives. Many of them have similar thoughts on matters of personal finance and events of the day, and those attitudes can impact investment decisions accordingly.